One of the flagship private equity-owned law firms splashed out millions more on acquisition costs in the last year as the business continued its rapid growth, newly-published accounts reveal.
In the year to 30 April, Fletchers Solicitors Limited spent £6 million carving out the personal injury division of national firm Shoosmiths. A further payment of £6m was deferred until a later date.
Last December, the company also acquired the trade and assets of Cheshire firm Scott Rees & Co: the accounts reveal this deal was worth almost £5m, including £2m cash upfront and £2.7m in deferred payments.
A further £1.9m is due this year as deferred payments for the historic acquisitions of Serious Injury Law and Emsley’s Solicitors, after £3.5m was paid out on these deals in the previous year.
Fletchers is one of the biggest firms to have been bought out by private equity investors – it was acquired by an affiliate of Sun European Partners in 2021 – but tends not to disclose how much it spends when it buys up smaller firms. The continued spending is an indication that the owners continue to want to invest even as they approach five years in control of the personal injury firm.
The accounts show that the firm’s profits fell by 11% during the 2024/25 year to £8.1m, while turnover increased by 32% to £76.9m.
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Alex Lynch, chief financial officer, said the firm’s model is to invest every penny made back into the business to fuel further growth and enhance long term value. ‘On average, Fletchers has grown revenues between 25-35% year on year by investing all the cash we generate and topping up with some debt,’ said Lynch. ‘Private equity puts money into law firms to make them more valuable, partnerships tend to focus on extracting money out of firms for the partners. That approach is perfectly reasonable but tends not to drive growth.’
She added that the long-term, drip-feed nature of revenue from personal injury cases was a more attractive option for investors rather than corporate firms which are often dependent on ‘key rainmakers’ who want to take their share of the value and are able to take work with them if they leave.
Staff numbers at Fletchers Solicitors alone (not including other businesses owned by parent company Lamed Topco) increased from 628 to 791 in the year. The five directors shared remuneration of around £1.5m.
The business took on extra debt, with the amount owed within a year increasing from £44.5m to £62.6m. But the increasing cash reserves and work in progress was such that net current assets were up by 27% to £77.5m.
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